The Role of E-business in SCM

Universe of Emerging Technologies and Science ISSN: 2349 - 655X

Volume I Issue IV September 2014

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Online Available at www.uniets.com | 2014-UNIETS-September-0000 1

THE ROLE OF E-BUSINESS IN SUPPLY CHAIN MANAGEMENT Alexander Harsono

Information Systems Department, STMIK Pontianak Jl. Merdeka Barat No. 372 Pontianak 74111, Kalimantan Barat, Indonesia

E-mail: [email protected] ________________________________________________________________________________________________________

ABSTRACT

The impact of e-business in supply chain management (SCM) has gained significant interest in researchers and academics in recent years since e-business and SCM are critical success factors. A case study on Dell Inc. was chosen because Dell Inc. has survived the recent economic slowdown since March 2000. This phenomenon was the result of Dells success story demonstrated a real case of how Dell Inc. effectively adopted e-business to support its SCM. Data was obtained via Web browsing and e-mail. This paper first discussed various activities that involved e-business and supply chain management process; information, products, and financial flows. It then illustrated the role of e-business in supply chain management to gain competitive advantages in dynamic business environment. Findings showed e-business has the capacity to have an impact on the physical, information and financial flows of supply chains. This paper is origin and empirical study that would be a contribution to business practitioners and academia.

Keywords: E-business, SCM, Information Sharing, Supply Chain Integration

1. INTRODUCTION In the past ten years, electronic business (e-business), as an overarching business concept, has received increasing attention from academics and practitioners alike. The term e-business was introduced by IBM in 1997. In its origins it is defined as the transformation of key business processes through the use of Internet technologies [1]. Amor [2] expands the definition by describing it as a secured, flexible and integrated approach in order to offer various companies values through the combination of systems and procedures and so being able to manage the core business procedures with the simplicity and penetration of Internet technology. These two definitions of e-business both refer to using the Internet to link with customers, suppliers and other associated partners. However, the term also implies the transformation of existing business processes into more efficient ones.

E-business has generally been pioneered by IT companies, where demand is constantly changing and products have

very short product life cycles and short order-to-delivery times as a result. Organizations successfully engaging in e-business are able to convert data from their back-end systems into a common readable format and thus are able to share information and conduct electronic transactions with their business partners via the Internet. It also encompasses the adoption of innovative business concepts, such as dynamic pricing through auctions and or reverse auctions, cooperation via purchasing consortia and direct online sales to customers. E-business is concerned with the use of the Internet to link companies with their suppliers, customers and other trading partners. As a business concept, it has evolved significantly since its introduction in the 1990s in parallel with the rapid rate of development of information technology (IT). SCM is fundamentally concerned with integration of activities both with and between organizations. E-business solutions in general are seeking to enhance supply chain effectiveness and efficiency through the automation of business processes. The adoption of e-business can result in benefits such as higher transparency, reduced transaction, manufacturing and other costs, reduced unmonitored corporate spending and more centralized purchasing spend and more coordinated and efficient collaborations for such projects as joint product design. E-business also facilitates collaboration and supply chain information sharing, such as order forecasts and inventory planning, automates requisition and purchase order creation and integrate payment processes, and help organizations develop plans for the more effective management of sourcing and logistics.

E-business has enhanced both supply chain efficiency and responsiveness by sharing real-time information regarding inventory, production scheduling, customer orders and delivery status, and other key information like product design, product availability and demand among supply chains partners. An objective of e-business is to streamline and automate as many processes as possible. A few examples of processes are credit card verification, production, purchasing, delivery, inventory management, or providing customer relationship management (CRM). This is done by e-business mechanisms such as e-markets, e-procurement, and e-CRM, as shown in Fig. 1. Note that processes in the figure involve several types of transactions. In order to better understand how e-business works; look at



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Fig. 1 and e-business model in Table 2 where a company such as Dell (labeled Our Company) provides products and/or services to customers, as shown on the right side [3]. To do so, the company buys inputs such as raw materials, components, parts, or services from suppliers and other business partners in the procurement process. Processing the inputs is done in its production/operations department. Finance, marketing, IT, and other departments support the conversion of inputs to outputs and the sale to customers.

1.1. E-Business Concept and What Role Does It Plays in SCM?

E-business is aimed at enhancing the competitiveness of an organization by deploying innovative information and communications technology throughout an organization and beyond, through links to partners and customers. SCM is the coordination of all supply activities of an organization from its suppliers and partners to its customers. So, it is apparent that e-business involves looking at how electronic communications can be used to enhance all aspects of an organizations SCM. It also involves optimizing an organizations value chain, a related concept that describes the different value-adding activities that connect a companys supply side with its demand side. The e-business era also involves management of a network of interrelated value chains or value networks.

The application of the Internet to business can best be understood by dividing it into two separate, yet connected concepts and set of practices [4]. The first is termed e-business and is defined as a collection of business models and practices enabled by Internet technology focused on the networking of customers, suppliers, and productive capabilities with the goal of continually improving supply

chain performance as delineated in Fig. 2 and 3. The second concept is termed e-commerce and is defined as the ability of business to buy and sell goods and services over the Internet. Over the past decade these terms have been used as if they were interchangeable. In reality, e-business is a more powerful concept that seeks to utilize the Internet to build integrative, collaborative relationships among supply chain members, while e-commerce is a subset of e-business concerned with the performance of commerce transactions electronically.

As illustrated in Fig. 2 and 3, all e-business activities occur between consumers, government and between businesses. E-business models can be separated into at least three major categories: a. Business-to-Consumer (B2C). This model is the most

known and applies to any business that utilizes the Internet to sell products or services directly to the consumer. The basic form of B2C model is termed e-stores or e-tailers. The goal of this model is to imitate an actual store shopping experience where consumers can browse through catalogs or search mechanism to locate, price compare, and order products and services to be shipped directly to their homes. Some of these B2C sites, such as Amazon.com, are pure-play in that they sell only through the Internet. Other types, such as Barnesandnoble.com, sell online as well as from an actual store outlet and are termed a bricks-and-clicks Web site.

Fig -1: How e-business works

Table - 1: E-business Models



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b. Business-to-Business (B2B). This model applies to any company that utilizes the Internet to sell products and services to other companies. Also termed e-procurement, this model is used by the buy-side organization for the purchase of manufacturing inventories, finished goods, and MRO goods and services based on a preexisting contract (systematic sourcing) or random purchasing or (spot sourcing) from various types of MRO hubs, yield managers, catalog hubs, and exchanges.

c. Business-to-Government (B2G). This model applies to any company that utilizes the Internet to sell products and services to government both domestic and foreign countries. This model is used by the sell-side organization to sell their products and services to both national and foreign government.

Ross [5] illustrated web-enabled e-business as delineated in Fig. 2 and 3 as follows:

Network technologies enabled by e-business standards have the potential to transform and integrate the internal corporate functional elements of many industries. The Internet facilitates the abolition of the trade-off between richness and reach of information, which means that communication can occur at almost zero cost, without constraints on the richness of information. Richness of information includes characteristics such as bandwidth, customization, and interactivity. Reach is defined as the connectivity, and is the number of agents involved in exchanging information. Before the development of the Internet, to reach large numbers of people with rich information was a costly and time-consuming process and prone to errors due to manual information replication.

Impact of e-business on the Supply Chain and the role it plays in SCM be illustrated as follows: while there are different e-business models, collectively they have had a dramatic effect on the operations, designs, and service factors of conventional SCM. The ability to sell to a global marketplace through the ubiquitous presence of the Internet has placed several unique demands on the supply chain. According to Chopra and Meindl [6], the impact of e-business on SCM can be divided into two spheres: the first associated with several elements oriented around cost/operations management and the second around sales/ service performance as delineated in Fig. 3. Providing detail answers to these two groupings of factors is essential to the effective pursuit of a profitable e-business initiative.

The ability to enter and follow up on orders through the Internet is probably the most radical facet of e-business. Among the critical elements of e-sales (e-sales is subset of e-business) impacting the supply chain can be found: a. Product variety. An e-commerce site enables customers

to choose from a much wider array of products than is possible with a bricks and mortar store. Pursuing a virtual inventory model means that the supply chains that actually service the customer will be complex, closely federated by information technologies and contractual relationships, and capable of seamless delivery to the customer.

b. Product planning. The ability of e-businesses to utilize networking technologies means that customer demand can be broadcast continuously through the supply chain, providing visibility to requirements all the way back to the manufacturer. This capability will enable supply chains to plan using the customer demand-pull or, at a minimum, more accurate forecasts leading to a much closer match of channel supply and demand.

c. Shortened Time to Market. Because an e-business company can introduce new products to the marketplace much faster than a conventional business, the pressure on the supply chain to acquire and distribute them is much greater. Supply chain entities will have to cultivate close relationships with manufacturers and supplying intermediaries so that promotion, pricing, advertising, documentation, forecasting, and other components can be swiftly executed and relayed down the supply chain.

d. Flexible Pricing, Promotions, and Product Offerings. Changes to price, promotions, and the product portfolio by the e-business firm must be matched by a mechanism that rapidly communicates these changes to the supply chain. Such changes will quickly have a bullwhip effect on channel inventories if poorly communicated to channel distributors and manufacturers.

Fig -2: Web-enabled e-business



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Sweeney depicts that managing information flows in the supply chain is one of the most crucial activities in SCM as the flow of materials and money is usually initiated by information movements [7]. Poor management of information flows essentially leads to the so-called bullwhip-effect that requires the holding of excessive levels of inventory. High demand visibility plays a strategic role in reducing inventory levels [8]. Efficient and effective network-based communication structures in a supply chain have the potential to offset these effects. Supply Chain Integration (SCI) and e-business are interrelated insofar as integrated e-business functions facilitate undistorted and accurate information sharing. In this way, optimal alignment of business functions represents the means to an effective overall SCI strategy.

SCM is essentially the optimization of material flows and associated information flows involved with an organizations operations. To manage these material and information flows e-business applications are today essential to bring the benefits such as reducing cost, improving service and inventory control [9]. SCM is presented as the premier application of e-business. By applying information systems, companies can enhance or radically improve many aspects of the supply chain. In the concept of e-business, supply chain management can be enhanced through buy-side e-commerce, internal communications, and relationships with partners and sell-side e-commerce. E-business technologies enable information flows to be redefined to facilitate the sharing of information between partners, often at lower costs than were previously possible, and at the same time frame, e-business technology can assist SCM in problem-solving as illustrated in Table 2. Much of the

excitement generated by the e-business concept concerns the benefits that companies can achieve through increasing the efficiency of the whole supply chain.

1.2. SCM Concept and What Does SCM Software Do?

A supply chain is a bidirectional flow of information, products and money between the initial suppliers and final customers through different organizations. It can be both internal and external in its nature. In an internal context, the elements of a supply chain are represented by various intra-organizational functions (such as for example sales and marketing, procurement, production planning, warehouse and transport management), whereas the external supply chain further encompasses movements of material, information and funds between companies and their suppliers, customers and various business partners.

SCM is defined as the integrated, process-oriented design, planning and control of goods, information, and cash flows along the entire value chain from customer to the raw-material supplier with the aims of improving customer orientation, synchronizing supply with demand, making the production more flexible and responsive to the demand, and downsizing of the inventory along the value chain [10]. SCM stages have been evolving from stages 1 (1960s) as centralized logistics management to stages 5 (technology-enabled SCM) in 2000s where the e-business affects the SCM functions as illustrated in Table 3[11]. Simchi-Levi et al. [12] defined SCM as a set of approaches utilized to

Fig -3: Enterprise Business Systems and E-Business Structures

Table -2: A summary of the problems of SCM and how e-business technology can assist



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effectively integrate suppliers, manufacturers, warehouses, and stores, so that merchandise is produced and distributed at the right quantities, to the right locations, and at the right time in order to minimize system-wide costs while satisfying service level requirements. Supply chains are increasingly competing with other supply chains and as such the ultimate goal of effective SCM is superior business performance. Supply chain integration (SCI) is an important part of SCM. It aims to facilitate the flow between all organizations in a supply chain and thus positively affects operational performance. In short, a key tenet of SCM relates to the need to move from fragmented supply chain architectures to configurations that are characterized by integration.

The reason why SCM came about is because industrial relationships have become increasingly complex over the last decades. Most companies use SCM software applications to track demand, supply, manufacturing status,

logistics, distribution, and at the time to share information and data with supply chain partners at an ever increasing rate [13].

1.3. Dells Case Study As being illustrated earlier, this case study on Dell Inc. is very interesting to discuss due to Dell Inc. has survived the recent economic slowdown since March 2000. This phenomenon was the result of Dells success story demonstrated a real case of how Dell Inc. successfully deployed e-business technology to enhance both supply chain effectiveness and responsiveness by sharing real-time information regarding inventory, delivery & shipment status and other key information like product design, product availability and demand among supply chain partners.

Dell Inc. was one of the first to establish a customer-driven PC configuration capability. Dell had a make-to-order assembly model that received orders from its own direct-to-customer retail channelsusing call centers, fax, and phone ordersbut no retail stores. Dells Web site leveraged the software applications and experiences of its own customer service representations to create an effective self-service Web application that let online customers create their own custom PC orders. Customers can experiment with different computer configurations using a choice board capability that shows them price differences for components and calculates the total price before finalizing their order.

Customers submit their PC order via the Web site- e-commerce, and the order data are translated into a design, the components are ordered, and then the right resources are electronically scheduled to fulfill the order Direct from Dell. For retail sales to business customers (which is a larger customer segment than end-consumer sales), Dells sales staff works with an organizations procurement managers to select a small number of PC configurations at a pre-negotiated price to fit the companys infrastructure standards and employee needs. Dell Computers has survived the recent economic slowdown since March 2000. This phenomenon was the result of Dells super-efficient supply chain that is affected by effective e-commerce. Dells vice president who was overseeing Dells SCM. Dells success story demonstrated a real case of effective integration and implementation of SCM which supported by its excellent e-business.

By year-end 2002, Dell was number one in market share for desktop PCs and was also the number one online computer retailer. However, by mid-2006 Dell had lost its market share position to Hewlett-Packard (which had merged with

Table -3: History of SCM Stages



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Compaq Computer a few years earlier). The companys highly efficient supply-chain model and direct sales retail approach were still intact, but by then its competitors were also able to compete online as well as through their traditional distribution channels.

This paper describes and critically assesses developments of e-business that have impacted supply network integration strategies. It starts with history and a summary SCM definitions as a proper understanding of the concept of SCM is a critical component in determining appropriate e-business applications and systems. SCM is recognized as a strategic weapon, by which business operations can be streamlined and overall competitiveness enhanced. It is widely accepted that a large proportion of the total cost base of companies is tied up in the supply chain. This paper first discussed various activities that involved e-business and SCM process; information, products, and financial flows. It then illustrated the role of e-business in supply chain management to gain competitive advantages in dynamic business environment.

2. RESEARCH METHODOLOGY A case study approach was conducted to describe a real practice of how Dells SCM has been enhanced by the e-Business. Data and information pertaining to Dells e-business and SCM on annual reports, whitepapers, journals, and analysts insights were obtained through Web browsing and e-mail.

The current data and information were then studied to get the whole picture of how Dells e-business and SCM take place and what is happening in business today of Dell in order to complete a better understanding of e-business and SCM in relation with how e-business boosts and enhances supply chain management. A literature review on e-business and supply chain management concept, the integration of e-business into the supply chain, and finally the role of e-business in the supply chain management were chosen because together they are making a large impact on one another.

3. RESULT AND ANALYSIS In 1994 e-business was just rising, and still was not popular as it is now. And Dell had not yet fully deployed e-business technology to support its SCM. But Dell successfully adopted its new business model or direct sell online via e-commerce which was the subset of e-business. And Dell was the first company to offer personal computers via mail order. This concept was Dells cornerstone business model. Dell had become one of the top five computer makers worldwide with annual profit billions of US$. This success story had changed due to tough competitions among its

competitors in this business line. The first PCs company to be threatening Dell was Compaq, which started a price war. At that time, Dell was taking orders by fax and snail mail and losing money. Dell suffered losses which reached over $100 million. The company was in trouble.

With the failure experience, Dell began harnessing e-business technology to enhance the SCM to streamline its business operations. This provided Dell with an opportunity to expand rapidly. Dell implemented aggressive online order-taking and opened subsidiaries in Europe and Asia. Dell also started to offer additional products on its Web site. This enabled Dell to batter Compaq, and in 2000 Dell became number one in worldwide PC shipments. At that time, Internet sales topped $50 million per day (about $18 billion per year). Today, Dell sells about $62 billion a year in computer-related products online, from network switches to printers, employing over 88,000 people. Consumers shop at dell.com using an electronic catalog. The sales are completed using mechanisms described in figure 4. In addition, Dell auctions refurbished Dell computers and other products at dellauction.com. The online auctions are an important sales channel. In 2006, Dell opened physical stores, mainly in reaction to customer demands.

Direct online marketing is Dells major electronic business activity. Dell sells to the following groups: a. B2C: Direct online marketing to individuals for their

homes and home offices b. B2B: To small businesses (up to 200 employees);

Medium and large businesses (over 200 employees) c. B2G: To Government, education, and health-care

organizations

3.1. The Reality Role of E-business in Dells SCM Dell has gained big benefits through successfully harnessing e-business technology in enhancing its SCM, particularly in todays e-business marketplaces. Still, there can be little doubt that e-business is not only here to stay, but that it now underlies the very foundations of business in todays global economy. The benefits are undeniable:

Fig -4: Dells Supply Chain Management Model



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a. E-business technology Synchronized Supply Chains Visibility into operating information across the value chain allows Dell to drive efficiencies across the entire value chain. These include increased inventory turnover, fast new product introductions, lower work in process (WIP) inventories, and others.

b. Increased Market Supply and Demand Visibility Such visibility enables more Dells customer choice, potentially better fit of products to buyers, and a larger market for sellers.

c. E-business plays an important role in SCM on Improving e-collaboration Dell has many business partners with whom it needs to communicate and collaborate. For example, Dell uses shippers, such as UPS and FedEx, to deliver its computers to individuals. It also uses third-party logistics companies to collect, maintain, and deliver components from its suppliers, and it has many other partners. Dell is using Web Services, an EC technology, to facilitate communication and reduce inventories. Web Services facilitate B2B integration. Integration efforts began in 2000 with other technologies when Dell encouraged its customers to buy online. Dell can provide e-procurement applications and consulting services. Dell also educates customers in its technologies and offers suggestions on how to use them. Finally, Dell has a superb communication system with its over 15,000 service providers around the globe. E-Market platforms will enable buyers and sellers to work together collaboratively for product design, planning, introduction, marketing campaigns, and life cycle management programs.

d. E-business plays an important role in SCM on E-Customer Service Dell uses a number of different tools to provide superb customer service around the clock. To leverage customer relationship management a customer service approach that is customer centered for lasting relationshipsDell provides a virtual help desk for self-diagnosis and service as well as direct access to technical support data. In addition, a phone-based help desk is open 24/7. Customers can also arrange for a live chat with a customer care agent. Product support includes troubleshooting, user guides, upgrades, downloads, news and press releases, FAQs, order status information, a my account page, a community forum (to exchange ideas, information, and experiences), bulletin boards and other customer-to-customer interaction features, training books (at a discount), and much more. Dell also offers educational programs at learndell.com. Dell keeps a large customer database. Using data mining tools, it learns a great deal about its customers and attempts to make them happy. The database is used to improve marketing as well.

e. E-business plays an important role in SCM on Price Benefits from Increased Competition Dell gains another benefit though auctions and e-markets that can be used to increase price competition and lead to dramatically lower procurement costs for buyers.

f. E-business plays an important role in SCM on Increased Operational Efficiencies These can be achieved through improved procurement, order processing, and selling processes. Efficiencies can also include faster order cycle times. E-business can have an enormous impact on an enterprises infrastructure, inventory, facilities, and transportation. E-business models that utilize extensive backward and forward integration will find their technology infrastructures and call-center services dramatically increased, while experiencing decreases in inventory through improved supply channel cooperation, reduction in facilities costs by centralizing or outsourcing operations, and increases in direct or partner-based transportation.

g. E-business plays an important role in SCM on Improved Partner and Customer Segmentation E-market platforms can be used to transform customer segmentation and provide appropriate levels of services to customers with different value.

h. E-business plays an important role in SCM on Efficient Payment Transfer E-business greatly facilitates the collection of payment. Often, especially in retail sales, the payment for the goods/services occurs at the moment of purchase either through credit card, P-card, or the use of a third party such as PayPal. Immediate payment can greatly increase the financial float of companies like Dell, who can use the funds generated from customers for investment way before the thirty- to ninety-day window before they have to pay their suppliers.

3.2. E-Business Also Affects SCM Function Within and Between Organizations

E-business technology enhances SCM activities in terms of information sharing. Data and information flow smoothly within and between organizations:

a. E-business plays an important role in SCM on Intra-business EC To support its build-to-order capabilities, significantly improve its demand-planning and factory execution accuracy, reduce order-to-delivery time, and enhance customer service, Dell partnered with Accenture to create a new, high-performance supply chain planning solution. Now in place in Dells plants around the world, the program, which paid for itself five times over during the first 12 months of operation, enables Dell to adapt more quickly to rapidly changing technologies and the business environment, maintaining its position as a high-performance business. Dell also has automated its



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factory scheduling, demand-planning capabilities, and inventory management using information technology and e-supply chain models.

b. E-business plays an important role in SCM on Affiliate Program Dell provides affiliate partners the opportunity to link from their Web sites to dell.com. Dell pays 2 to 4 percent on any qualified sale made from clicking on Dells link at the partners sites (referring buyers).

Dell has been one of Fortunes top five Most Admired companies since 1999, and it continuously advances in the rankings of the Fortune 500 and the Fortune Global 500. Dell has over 100 country-oriented Web sites, and profits are nearing $3 billion a year. If you had invested $10,000 in Dells initial public offering (IPO) in 1987, you would be a millionaire just from that investment.

In 2006, Dell opened physical stores to match its competitors and customer demands. Dells major competitor, HP, regained its top PC maker position in 2006, leaving Dell in second place, and stayed in the lead through 2008.

Rapidly changing business conditions have forced Dell to restructure its operations. Michael Dell returned to the CEO position in 2006, and a restructuring of the company began shortly thereafter. All sales to businesses are now managed centrally, rather than from three regional headquarters around the globe. In addition, in 2008 the company cut its workforce by 8,000. It also launched a blog called Direct2Dell. Dell also is expanding its business not only in the computer industry but also in consumer electronics.

4. CONCLUSIONS AND PERSPECTIVES 4.1. Conclusions E-business plays important roles in SCM as being practiced by Dell Inc. E-business can drive new organizational forms (such as a virtual organizations), fulfill certain tasks in the inter-firm context and allow firms to improve supply chain processes. Therefore, e-business has a vital role to play in integrated SCM. SCM looks at chains (or networks) of companies connected with each other through supplier-customer relationships, in particular on the planning and control within and among the supply chain partners.

A critical success factor for all participants in a supply chain is customer satisfaction. At one end of the supply chain is the end customer who creates the demand for the end product. This demand indirectly produces the demand for the intermediate and preliminary products and ultimately for the raw materials. The better the supply chain works, the stronger the partners competitive position on the market.

Dells e-business that had supported its SCM has run efficiently, the utility for the customer increases in terms of price, quality, and delivery time. This in turn leads to happier customers, who generate more demand for the end product and thus increase the revenue of all supply chain partners. SCM is an approach that deals with the flows of goods and information across entire logistic chains. Fig. 1 and 3 give an example of what the stations of such a chain can look like: suppliers of the company, various departments (e.g., purchasing, manufacturing, dispatching), distribution centers, merchants (wholesale, intermediaries, retail), and customers. Additional stations that are not shown in the figure include shippers and their depots. The figure also shows that the objects that flow through the chain include not only goods and information but also money. The flow of money goes in the opposite direction from the flow of goods. Although the exchange of money is an important part of the business relationships between the partners, it is usually not explicitly considered in SCM. That is, SCM focuses more on the flows of goods and information.

In the field of logistics, the flows of goods and information have been examined for a long time. A traditional differentiation of logistics was according to business functions, for example, into procurement logistics, production logistics, distribution logistics, and disposal logistics. Later, the integration aspect was also taken into consideration, and the term logistic chain came into use. SCM has evolved from logistics, but it has a stronger focus on the management of the chains, crossing business processes, business functions, and even the boundaries of the company. This means that SCM deals with the proper functioning of the entire supply chain with all partners included, not only with effective processes of one company.

SCM can be considered as the integrated, process-oriented design, planning and control of goods, information, and cash flows along the entire value chain from the customer to the raw-material supplier with the aims of improving customer orientation, synchronizing supply with demand, making the production more flexible and responsive to the demand, downsizing of the inventory along the value chain, and of course the SCM would not work properly with being supported by e-business technology as discussed in this case study of Dells previous operations 1n 1994.

Some of the barriers to e-business adoption are related to human factors (e.g. insufficient leadership, unwillingness to cooperate, resistance to change, inertia, lack of trust, personal insecurity, fear of losing jobs, threat of being by-



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passed by technology, communication problems and difficulties in aligning the processes and cultures of partner companies). Other barriers relate to structures, processes and systems (e.g. lack of resources, the plethora of different standards, lack of services provided by e-marketplaces). Many organizations have focused on a few key e-business services to date, but are not considering potential benefits across the range of services available and across the supply chain. Currently available e-business solutions are still some way from covering the entire spectrum of business requirements and relatively few options are readily available to support or automate complex activities. They have the potential to evolve from matchmaking or transaction support focus to knowledge and trust networks, where common workflows can enable SCM on a more widespread basis in future. However, more research is required to better understand these issues across a variety of business contexts and sectors.

Highlighting the process-oriented approach to SCM is important. Process orientation has many advantages. In SCM, it is even more relevant because the business processes involve various departments, not just in one company, but in different companies. The attribute integrated in the definition expresses that all partners in the processes have to coordinate their activities. It is worth noting that supply chain management includes not only the planning but also feedback and monitoring, controlling, and adapting the supply chain.

4.2. Perspectives Dell is strong business case on IT investment and management. The case study in Dell Inc. is just show case that e-business plays a crucial role in enhancing SCM if implemented successfully. Michael Dell, the founder of Dell Inc. is also the owner (may be a director or president director at the same time) of the company. So, the decision-making concerning about IT investment was easy to carry out by the owner himself because Dell himself made his own decision directly. For other companies, it may not be the same due to complicated management decision making on IT investment.

It is important to have insights on the critical success factors that would affect e-business and SCM implementation; such as top management support, assessment, software selection, business process and re-engineering, customization, phased implementation, testing/try run, user training, and final rollout. E-business has not only to deal with technology, but also a range of important human and organizational issues. Without top management support, e-business is difficult to

implement successfully. For smaller firms in particular, where resources are limited; the lack of financial resources, managerial and technological skills and system integration can inhibit e-business adoption. More adequate training and education in e-business and change management is a critical factor for the future, as companies tend to express hesitation about the use of emerging e-business technologies.

5. REFERENCES

[1] IBM. i2 & Ariba, November 2000, E-marketplaces changing the way we do business Whitepaper published by Ariba (www.ibm-i2-ariba.com): p. 1

[2] Amor, D., 2000, The E-business (R)evolution, Dedham, MA, Galileo Press: p. 5

[3] Turban, E., and Volonino, L., 2012, Information Technology for Management 8th edition, 2012, John Wiley & sons Inc: pp. 165-166

[4] Ross, David, F., 2011. Introduction to Supply Chain Management Technologies, 2nd edition, CRC Press: pp. 94-100

[5] ................., Introduction to Supply Chain Management Technologies, 2nd edition, CRC Press: p. 97

[6] Chopra, S. and Meindl, P. Supply Chain Management: Strategy, Planning, and Operation, 5th edition, Pearson, Global Edition. 2013: pp. 20-35

[7] Sweeney, E., 2007, Introduction, In Perspectives on Supply Chain Management and Logistics Creating Competitive Organizations in The 21st Century. Dublin: Blackhall Publishers: p. 81

[8] Sweeney, E., 2007, Introduction, In Perspectives on Supply Chain Management and Logistics Creating Competitive Organizations in The 21st Century. Dublin: Blackhall Publishers: p.85

[9] Chaffey, Dave, 2009, E-Business and E-Commerce Management: Strategy, Implementation and Practice, 4th edition, Pearson Education Limited. UK: pp. 331-335

[10] Kurbel, E., Karl, 2013, Enterprise Resource Planning and Supply Chain Management: Functions, Business Processes and Software for Manufacturing Companies, 1st edition, Springer: p. 223

[11] Ross, David, F., 2011. Introduction to Supply Chain Management Technologies, 2nd edition, CRC Press: p. 7

[12] David Simchi-Levi, David, Kaminsky, Philip, Simchi-Levi, Edith, 2004, Managing the Supply Chain: The Definitive Guide for the Business Professional, Mcgraw-Hill: pp. 4-5

[13] Kurbel, E., Karl, 2013, Enterprise Resource Planning and Supply Chain Management: Functions, Business Processes and Software for Manufacturing Companies, 1st edition, Springer: p. 222

6. ADDITIONAL READING



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[14] Andreas, Meier and Stormer, Hendrik, 2009, e-Business and e-Commerce: Managing the Digital Value Chain, 1st edition, Springer

[15] Adolfo, Crespo, Mrquez, 2010, Dynamic Modelling for Supply Chain Management Dealing With Front-end, Back-end and Integration Issues, 1st edition, Springer.

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The Role of E-business in SCM

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